Alexion Pharmaceuticals has agreed to acquire Achillion Pharmaceuticals for $930 million-plus, the companies said today, in a deal designed to strengthen the buyer’s portfolio of rare disease treatments based on complement inhibitors with Achillion’s pipeline of small molecule, oral factor D inhibitors.
Based in Blue Bell, PA, Achillion focuses on developing treatments for complement alternative pathway-mediated rare diseases, such as paroxysmal nocturnal hemoglobinuria (PNH) and C3 glomerulopathy (C3G).
Boston-based Achillion’s pipeline is led by the Phase II first-generation, oral factor D inhibitor danicopan (ACH-4471), which last month won the FDA’s Breakthrough Therapy designation, and is set to enter Phase III trials in early 2020.
Also in Achillion’s pipeline is second-generation oral small molecule factor D inhibitor ACH-5228, which in July generated positive Phase results in a I multiple ascending dose (MAD) study outside of the U.S. The company is also in preclinical phases of developing “multiple” third-generation oral Factor D inhibitors, one of which is expected to enter the clinic in 2020.
Achillion’s Factor D inhibitors, Alexion reasons, will complement its C5 inhibitors led by the marketed blockbuster drug Soliris® (eculizumab), indicated for generalized myasthenia gravis (gMG) in adults who are anti-acetylcholine receptor (AchR) antibody positive, paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS), and neuromyelitis optica spectrum disorder (NMOSD) in adult patients who are anti-aquaporin-4 (AQP4) antibody positive.
Soliris has generated net product sales of $1.943 billion in the first half of this year, up 14% from $1.698 billion in January-June 2018.
In December 2018, Alexion won FDA approval for Ultomiris® (ravulizumab-cwvz), a C5 inhibitor indicated for PNH and designed to provide immediate and complete inhibition for 8 weeks. Ultomiris racked up $78.8 million in the first six months of this year.
“Alexion has demonstrated the transformative impact that inhibiting C5 can have on multiple rare and devastating diseases. However, we believe this is just the beginning of what’s possible with complement inhibition,” Alexion CEO Ludwig Hantson, PhD, said in a statement. “Targeting a different part of the complement system—the alternative pathway—by inhibiting Factor D production addresses uncontrolled complement activation further upstream in the complement cascade, and importantly, leaves the rest of the complement system intact, which is critical in maintaining the body’s ability to fight infection.
“We believe this approach has the opportunity to help patients with diseases not currently addressed through C5 inhibition,” Hantson added. “We look forward to applying our nearly three decades of complement and development expertise to unlock the potential of oral Factor D inhibitors and bring these benefits to patients.”
Beyond C5 Inhibitors
The deal also continues Hantson’s strategy since taking Alexion’s helm in 2017 of diversifying its pipeline beyond C5 inhibitors.
Just last week on October 10, Alexion agreed to pay Stealth BioTherapeutics $30 million for an option to co-develop and commercialize Stealth’s elamipretide, a mitochondrial disease candidate now in a Phase III study in people with primary mitochondrial myopathy (PMM). If Alexion exercises the option, it will pay Stealth an option exercise fee, an additional equity investment, development funding and potential regulatory and commercial milestone payments.
In March, Alexion announced a pair of collaborations totaling potentially more than $1.3 billion—a partnership with Affibody aimed at co-developing an autoimmune disease treatment, and an alliance with Zealand Pharma aimed at expanding Alexion’s pipeline into peptide therapies. And last year, Alexion acquired Syntimmune for up to $1.2 billion, a deal completed in November 2018 and designed to broaden the buyer’s rare disease pipeline.
Alexion agreed to pay Achillion approximately $930 million, or $6.30 per share of Achillion common stock, to be funded with cash on hand. As part of the deal, Alexion will acquire the cash on Achillion’s balance sheet, which as of September 30 was approximately $230 million.
The actual amount will be determined when the transaction closes—something that is expected to occur in the first half of 2020, pending approval of Achillion shareholders and satisfaction of customary closing conditions and approval from relevant regulatory agencies, including clearance under the Hart-Scott Rodino Antitrust Improvements Act.
Alexion also agreed to pay Achillion shareholders non-tradeable contingent value rights (CVRs) tied to achieving clinical and regulatory milestones within specified periods. Shareholders would receive $1 per share upon FDA approval of danicopan, and another $1 per share upon initiation of Phase III studies for ACH-5228.
“We have established great momentum—discovering and advancing several small molecules into clinical development that have the potential to treat immune-related diseases associated with the alternative pathway of the complement system,” stated Achillion President and CEO Joe Truitt. He cited danicopan having shown proof-of-concept in PNH and proof-of-mechanism in C3G.
“We believe there is significant opportunity for Factor D inhibition in the treatment of other diseases as well,” Truitt added. “Alexion is an established leader in developing medicines for complement-mediated diseases, and we look forward to working together to accelerate our objective of bringing novel therapies to patients as quickly as possible and ensuring that the broad promise of this approach is fully realized.”